Anne Layne-Farrar discussed the implications that arise from government intervention into SSOs’ governance models. There needs to be a trade-off made between the degree of openness and consensus and the speed of the standardization process. Government mandates would simply ignore today’s diversity in an attempt to provide a one-size-fits all solution.

This conclusion was further highlighted in an exclusive interview with Per Andersen, who had performed a study attempting to rank SSOs based on certain criteria of openness. Since there is no unambiguous definition of “open”, different SSOs simply display various nuances of openness. Andersen also pointed to the rare success of government involvement based on political strategy, market dynamics are much better tools for governments to use in order to reach their goals.

Peter Brown, OASIS Board Chairman, provided in an interview valuable insights into actual SSO governance. Brown stressed that market success of any organization is based on confidence, which in the case of OASIS has been achieved through transparency policies. There have been no governmental attempts to influence the governance model of OASIS, and Brown believed that any such attempts in the future would go unanswered.

Oliver Bell (Reforming the Reformist Agenda) highlighted the benefits associated with a range of diversified SSOs. His claim is that today’s SSOs exist in an ecosystem formed by a dynamic market and the diversity we see, offers the prerequisite flexibility, competition and choice, for this market. No standard produced by an SSO or standards setting process, can be said to be “better” than that of another SSO or even guaranteed to hold “some level of immediate intrinsic value”. Therefore, when speaking of reforming SSOs, the focus should not be on simplifying the industry as a whole and hence decreasing the broad array of processes available today; but rather the inclusion of a “broader array of voices collaborating” to evolve the processes we have today towards meet the needs we know industry will have in the future. He concludes that although the vast diversity present in the ICT standards setting process can lead to a fair amount of confusion and frustration; the current system of diversified SSOs provides a solid platform to build upon.

Anne Layne-Farrar discussed the implications that arise from government intervention into SSOs’ governance models (Greasing the Gears or Gumming Them Up? The Government’s Role in Standard Setting Governance). Layne-Farrar points to the dangers of imposing a cap on licensing fees imposed by patent holders for intellectual property deemed essential to the standard. Specifically, she covers a model of limiting the maximum rate to that of the incremental value contributed by the IPR. She suggests that an imposition such as this would seriously decrease the economic incentives of innovation and fails to address the difficulty inherent in determining this incremental value. Furthermore, a trade off is to be made between the degree of openness and consensus and the speed of the standard setting process. Any government mandated rule would simply provide a one-size-fits-all solution which would ignore the diversity seen among SSOs today.

Ajit Jaokar (The Open Web Foundation and the Evolution of Web SSO?) shared his experiences from the Open Web Foundation. He expresses his belief that the OWF fills a gap in the SSO market as it essentially functions as a community-driven incubator of standards and because of its democratic ethos. Also, the OWF offers flexibility and openness, brings together formal and informal standards and addresses issues of future development. Thus, Ajit finishes by raising the question: Is the path chosen by the OWF a shape of things to come?

In an exclusive interview, Per Andersen, Managing Director of IDC Nordic and Benelux discussed the difficulties of setting criteria for openness in order to compare SSOs, since no unambiguous result can be found due to the loosely defined meaning of “openness”. This, he said, led to his study rather comparing “nuances of openness” in all aspects, from IPR policies to meeting documentation. Further, Andersen described the public sector interest in open standards as political strategy, and pointed out that such governmental involvement is rarely successful, especially not when rules are imposed in areas where market dynamics are much better instruments for achieving their goals.

In a second interview, Peter Brown, OASIS Board Chairman, gave valuable insights into the governance of OASIS. The market success of OASIS, he said, has been the result of confidence, which in turn has been achieved through OASIS’s transparency policies covering the entire standards setting process. This high level of confidence has been critical due to OASIS’s active involvement in areas such as eID and eHealth, where personal integrity is vital. Brown also discussed his belief that OASIS would not respond to any governmental attempts to influence the governance of the organization, although he has not yet seen any such attempts manifested. In conclusion, he welcomed the debate on SSO transparency. While he believes that many bodies are reluctant to open up because they are reliant on monetizing on standards, OASIS will remain vigilant and continue to push for the development and implementation of open standards.

Peter Brown gives a valuable insight into the governance of OASIS and some of the rationale behind it. Also, Peter Brown offers his general view of governance issues such openness, governmental interference and much more.

Interview for Talkstandards.com with Peter Brown, Chairman of the OASIS Board

Talkstandards [TS]: OASIS is well known for its transparency; what is the underlying rationale for this type of governance?

Peter Brown [PB]: Its origin is in the open source movement – the belief that by opening up a process to a community, you can “crowd source” and achieve better results. But it is also a powerful business model – by providing a transparent platform in which standards can be developed and an up-front choice of IP models with which our members are comfortable.

TS: Is transparency considered more important in some stages of the process than others?

PB: No, we believe that openness is important throughout the whole process

TS: In your view, how can SSOs’ governance contribute to the competition between organizations?

PB: Organizations, whether public sector agencies, government departments, NGOs or private companies, are increasingly looking at governance models and processes as an important consideration for their participation. I think that we are moving from a “defensive”, “insurance policy” approach to participation in standards organizations, based on the idea that you need to be there in order to ensure that your ideas are not locked out; to a more positive, value-driven approach based on recognizing the inherent value of standards in driving – not inhibiting – market competition and innovation.

TS: Further, how has OASIS’s governance of the standardization process affected the market success of developed standards?

PB: Increased confidence in the market, and the output that comes through, are the result of this openness and the implicit offer to any standard “consumer” to take a look at how it was put together. This is in stark contrast to the more closed processes in which the consumer is presented with output from an opaque sausage machine with dubious ingredients and processes.

TS: Many OASIS standards are used in areas where privacy and trust are of utmost importance (e.g. eHealth and eID); to what extent has the level of legitimacy of the standardization process contributed to the commercial success of OASIS standards?

PB: The identity management domain is, by its nature, very cautious and suspicious of opaque systems in which it is difficult to identify the motives, interests and offers of the various players. High levels of confidence are a pre-requisite to positive cooperation between partners and it is clear to me that the offer of a stable, transparent and sustainable process and environment has been a key factor in the choice of OASIS as the place to do this work.

TS: You have expressed that your view of OASIS is more of a service provider, supplying a platform where standards can be efficiently developed, than strictly as an organization. Does this affect the level of maintenance of published standards? How does OASIS react and evolve to meet changes in market demand or take heed to user feedback?

PB: It is an essential part of our process to recognize that the publication of a standard is not the end of the story. The service we provide to our members allows the story to evolve – whether it be the maintenance or updates of a standard, spin-offs, detailed implementation guidelines, or other work products, the community of members around any standard provides further value to those affected by or using any given standard.

TS: Many EU governments, supported by EC directives, are pushing for the implementation of eGovernment solutions which implies that governmental interest in OASIS standards is rising. Has this manifested in any attempts to affect the standardization process in terms of transparency and maintenance?

PB: No. We are proud of our process and hold it up as an example for others to follow. On the other hand, there are vested interests that are not always keen on such transparency and prefer to work through more opaque channels to defend particular interests. It has generally been a driving principle of eGovernment to favor openness and OASIS has certainly benefited from that.

TS: In case of such developments in the future, how would OASIS respond to such interference and what do you consider to be legitimate requirements for government intervention in the standardization process?

PB: We remain vigilant. In the current debate on the future of the European standardization system, we have seen that some bodies feel threatened by such openness, sometimes because a core part of their business models rely on monetizing their standards – make them open, and they lose money. Historically, this has been the elephant in the room and it is encouraging to see that it is being addressed.

OASIS Short info: OASIS (Organization for the Advancement of Structured Information Standards) is a not-for-profit consortium that drives development, convergence and adoption of open standards on a global scale. Since its founding in 1993, OASIS has gained more than 5,000 participants from over 600 organizations and become the largest producer of Web services standards. Transparency characterizes the governance and procedures of OASIS, with members setting the technical agenda and striving for openness throughout the process. Technical categories in which OASIS is active include: Web services, eCommerce, Security and XML processing.

Peter Brown Biography: Peter is founder and Managing Director of Pensive, a software solutions company for subject-centred computing, based in Belgium. He is also President and Chairman of the Board of OASIS, the global consortium that is advancing open standards for the Information Society.

Peter has more than 25-years experience working in European public institutions. He is currently on unpaid leave from the European Parliament where he previously headed the service responsible for information architecture and data standards. He has been heavily involved in standards work within the European Union institutions; at a European level through the European standards agency, CEN; and globally in OASIS and ISO. He was a co-editor of the “Reference Model for Service Oriented Architecture (SOA)”, now an OASIS Standard. He has been active in promoting the ISO 13250 standard (“Topic Maps”) as a standard for facilitating information federation and delivering practical semantic technology solutions today.

Peter is a regular keynote speaker and contributor to conferences throughout Europe and North America. His main professional interests are interaction design, subject-centric computing, semantics and “making the Information Society a safe place to be in”, through greater attention to data protection, privacy and users’ control over their digital assets.

A major theme of the interview was his 2008 report titled the “Evaluation of Ten Standard Setting Organizations with Regard to Open Standards” (full pdf here). The report, that was commission by the Danish Government, seeks to evaluate and compare the openness of 10 Standards Setting organizations. A summary of the report can be found here.

Other topics addressed during the interview are SSO Governance, Open Standards as well as the role of government in the standards setting process.

Interview for Talkstandards.com with Per Andersen, Managing Director IDC Nordic and Benelux

Talkstandards [TS]: Your report, “Evaluation of Ten Standards Setting Organizations with Regard to Open Standards”, was a result of the Danish parliament’s adoption of a 2006 resolution to ensure the public sector’s use of open standards. Would you say that this was a political reaction to the increased use of informal standards, particularly in the ICT industry? If so, why do you think that this has happened in Denmark?

Per Andersen [PA]: As with many political decisions they are not necessarily based on a purely technical rationale – as politicians are not expects in IT. In this case one particular party made “open standards” a key political issue, based on what I believe was a combination of lobbyism from open source communities and a genuine interest in trying to ensure increased software interoperability. It took some time for them to get support for the agenda, but at the end they succeeded as no other party wanted to support “closed, proprietary standards” of image reasons.

TS: What do you see as the driving motivation behind the increased government interest in open standards, and particularly the interest in the industry-driven standardization process?

PA: The initiatives around open standards are an extension of the government “OIO” (“Public Information Online”) which was started in 2001 with the objective of creating common platforms and the possibility of exchange of data across all public organizations. It was natural for the National IT Agency to start promoting the use of standards (such as XML) in the public sector. Therefore, the government is looking for widely accepted standards – which in reality are often industry defined standards, although the government does not have a preference for such standards per se.

TS: In your report, you evaluate and compare ten standard setting organizations based on their degrees of openness both within the organization themselves and consequently the products they deliver. How did you initially tackle this problem and did you face any difficulties when setting the comparison criteria?

PA: Fortunately, some research had been done in this area, such as by Ken Krechmer. The challenge was to make a number of abstract criteria operational so that they could be tested against the actual realities of SSOs. In this process we tried to frame the criteria by looking at what SSOs of various types were actually doing.

TS: An ongoing theme throughout the report is the difficultly faced when comparing these organizations based on openness. Where does this difficulty arise?

PA: The major difficulty, which relates to the previous question, is that “openness” is a very loosely defined quantity. At the same time, any SSO must be open in some way or form – if standards are secrets, not documented or not supported, they will obviously not be adopted – which is not at all the intention of the SSO. So, it basically came down to comparing “nuances of openness” or basic principles of the interpretation of “openness” – which can be questioned as meaningful.

TS: What qualities or attributes of openness are regarded as most important? Can you identify how the focus of which qualities are considered important shifts between different end users (e.g. public sector, industry, consumers)?

PA: In reality, the only major difference is found in the IPR area. Here the opposite attitudes towards “free IPR” versus “licensed IPR” were very visible between various organizations. However, it is not necessarily a question of “openness” but is a quite different discussion about innovation and business processes – yes, one can have an opinion about this, but I don’t see it as “open” versus “closed”.

TS: How does the differences in openness across the compared SSOs relate to their internal governance?

PA: First of all, SSO’s governance can be more or less documented. But the fact that it is not fully documented does not necessarily mean that they do not operate in an open way. In fact we found examples of more open organizations with less formalized documentation of this. Secondly, even if the governance is documented there is no guarantee that the organization is actually behaving according to the governance. So, another challenge was to evaluate how SSOs are operating versus the actual formal governance.

TS: Within your report you discuss that there is a lot of variation in how different SSOs face the tradeoff between open and closed membership in regards to funding. How does this tradeoff affect both openness and governance?

PA: There is a fundamental conflict between “openness” and “financing of activities”. If all activities are free (which some consider for the ultimate “openness”) it is difficult for the SSO to finance a professional body with publications, testing, consultancy etc. On the other hand, if membership has a fee or services must be paid for, some will accuse the SSO for not being “open for all”. Most SSOs in reality have found a balance between the two extremes, and I don’t believe a totally “free SSO” can be effective. Therefore the relationship between “free access” and “openness” can be questioned.

TS: Following the publication of “Evaluation of Ten Standards Setting Organizations with Regard to Open Standards”, what feedback did you receive? In particular, how did the Danish Government, who commissioned the report, respond to the findings?

PA: It must be understood, that the report was commissioned because the government was caught in a hot political discussion of ODF and OOXML and whether to allow both or just one of them. At the end the government decided – to much regret for open source lobbyists – to allow both document standards to co-exist, at least for a period of time. This study was one of the arguments why both standards actually met the requirement, decided by the parliament, that standards in the public sector must be open. The decision about the two co-existing document standards was re-evaluated recently, but the government did not reverse the previous strategy.

TS: Let’s conclude with a forward-looking question: Will we see governments increasingly dictating the rules for standard setting organization governance? Will this development be legitimate or, as we have seen with official standards bodies, will this simply reduce efficiency through competition?

PA: I have been a market analyst for 20 years. I have always found it intriguing when governments have tried to dictate market behavior – and I really have difficulty finding examples of when this has been a success, while there are many examples of the opposite. Following on from this, I seldom find it a good idea when governments try to impose rules in areas where market dynamics are much better instruments to achieve the goals.

Per Andersen Biography: Since 1996, Per Andersen has been the managing director for IDC Nordic. With a total staff of 30, IDC Nordic has offices in Copenhagen and Stockholm and is the leading provider of ITC market intelligence in the region. Since 2007, Per Andersen is also managing IDC Benelux, located in Amsterdam, with a total staff of 20. From 1996 to 2006, Per Andersen also managed IDC’s European Software Market Research Centre. From 1990 to 1996, Per Andersen was the manager of IDC’s European Unix and Client/Server Centre publishing market research reports on the European market to IT vendors and users. In addition to this, he has been responsible for starting up IDC’s Internet/intranet research in Europe. As one of IDC’s lead analysts on the European markets for software, IT services, Internet, eBusiness, servers and open systems, Per Andersen has been presenting at a wide range of conferences world wide, and his opinions are highly regarded by the press. Per Andersen holds a M.Sc. degree in Computer Science from University of Aarhus, Denmark.

The OWF home page says: The Open Web Foundation is an attempt to create a home for community-driven specifications. Following the open source model similar to the Apache Software Foundation, the foundation is aimed at building a lightweight framework to help communities deal with the legal requirements necessary to create successful and widely adopted specification.

From the above, ‘Community driven – light weight specifications’ is the operative concept.

Thus, one could view OWF as an ‘incubator for standards’. There have been a number of detailed discussions on the OWF forums about what exactly OWF is: It could be seen as a ‘creative commons’ for standards with the potential raison-d’etre: ‘to expand the size, scope, and functionality of the web by promoting interoperability, reuse, transparent, and open/royalty-free technologies, formats, and protocols’. (Chris Messina)

Why is such a foundation needed for the Web currently?

The original presentation from David Recordon announcing the foundation of OWF offers more insights behind the vision. The OWF addresses the evolution of open source and the Open Web especially as the conversation shifts to ‘data’ as we enter the domain of Cloud computing. Thus, OWF is concerned with a scope beyond Open APIs and also addresses the realm of data, interoperability and simplicity. One could see it as evolution of the Web itself beyond the original http protocol to other open protocols like XMPP. In addition, currently, a lot of work is happening outside the formal standardization bodies. Thus, OWF could be seen as an umbrella organization that brings these ideas together in a ‘Lite’ format and with an emphasis on individual contribution. OWF is concerned with four things: The incubation process (creating new open specifications); licensing (ex non assert agreements), copyright (ex – creative commons) and community (to support the open web).

The OWF also has a more democratic ethos – individuals can join and contribute and if possible even become office bearers. This is in contrast to other standards bodies where participation is often corporate and individuals do not wield large influence

I like this approach for a three reasons. Firstly: because of the more democratic/inclusive emphasis on individuals and not corporates or governments. Secondly: because this approach gives choice, flexibility and transparency and brings together formal standards, informal standards and also widely adopted industry standards. Thirdly: it addresses the issues going forward, ex Data and Cloud

At a minimum, OWF is an interesting experiment. But more interestingly, it may well be the shape of things to come for SSOs because of its more organic, inclusive and flexible methodology.

What do we think? Is the path chosen by OWF a shape of things to come for SSOs?

“A more productive type of intervention [as compared to ex post antitrust/competition based on Article 82 or the Sherman Act] is, however, when the Commission follows the adage that ‘prevention is better than cure’. In other words, it is a lot better if we can prevent abuses of standard setting processes from occurring in the first place rather than have individual problem cases coming onto our radar screen.”

In another speech two months later, Kroes stated that:

“Should the need arise, then the Commission will also step in to support standard setting bodies, to help to design their rules so as to avoid ‘capture’ of a standard by a ‘patent ambush’ after it has been adopted.”

Whether government agencies – be they the European Commission, the U.S. Federal Trade Commission, or any other like body ¬¬– should play an active and indeed proactive role in standard setting IPR policy remains controversial. It seems clear that ex post intervention, in the form of government agency cases aimed at alleged anticompetitive behaviors like patent ambush, is well ensconced.

The U.S. has had a number of FTC cases of that sort (including Dell and more famously Rambus), as does the EC (including its own investigation of Rambus). But the FTC has stepped further afield as well, relying on Section 5 of the FTC Act to bring claims of unfair business practices against Negotiated Data when it attempted to alter one of its patent’s terms, terms which had been announced by the patent’s previous holder to the members of IEEE. Many commentators expressed their concern over the FTC’s untethering of the Sherman Act, or even any claims of deceptive practices, from the claims in the Negotiated Data matter.

Perhaps even more controversial are certain policy prescriptions that call for a more proactive role for government intervention, along the lines envisioned by Kroes in the above quotes. For instance, some have called for a cap on licensing fees for patents deemed essential for a standard, setting the maximum rate equal to the “incremental value” the IPR contributes. Others have called for a rule preventing patent holding SSO members that have committed to license on FRAND terms from ever seeking an injunction in those instances when the parties cannot agree on licensing terms or when the standard implementers are found to have infringed the patent.

Given the dearth of self-motivated SSO IPR policy reform, it has been suggested that policy changes of these sorts could be accomplished by government edict or at least through coordinated court practice, so that firms participating in SSO efforts would face the restrictions regardless of the particular SSO involved.

There seems to be broad consensus that some sort of IPR policy changes are in order for standards bodies in general, but a number of issues and caveats remain. Chief among these are the inevitable, even if unintended, consequences of some ill-thought-through proposals. We cannot stop with an assessment of whether the proposed policy change might alleviate a perceived problem in standard setting; we must also think through the full range of incentives that the proposal would lead to.

For example, imposing a rule that states patent holders can charge no more than the incremental value their patents contribute to the standard makes a number of assumptions: that the innovations have been developed, that patent holders have already joined the SSO, that “incremental value” can be objectively agreed upon, and that once agreed “incremental value” appropriately compensates the patent owner for the cost and risk involved in the R&D.

Once mandated, a licensing cap could be expected to have detrimental effects on innovative firms’ incentives to conduct R&D and to join in cooperative standard setting. Likewise, most people would agree that transparency and consensus in standard setting decision-making processes are desirable, but note also that the higher the degree of openness and consensus, the slower the standard setting process is. Important tradeoffs in the guise of speed-to-market must be kept in mind, and will of course differ across standards and industries making one-size-fits-all rules inappropriate. Factors like these help to explain the differences we see across SSOs, but which likely would be ignored by any government mandated rules.

Whether government intervention can be appropriately sensitive to market needs, diversity in SSO membership and the full range of implications of policy change on participants’ incentives is debatable.

Today SSOs are very diverse. Almost all of them produce both effective standards and standards that never achieve marketplace acceptance. But the flexibility, competition and choice that this ecosystem provides is healthy for the ICT industry. The processes by which ICT standards are created can vary greatly and are constantly evolving. Formal ICT standards are developed in formal SSOs, industry consortia, professional associations, and other industry groups. Many of these diverse organizations have open and published processes that allow all relevant stakeholders to participate and help to balance conflicting requirements. Other ICT SSOs are more focused and less formal collaborations, which can produce needed standards that are very targeted in nature or which can incubate standards for further standardization at a more formal SSO.

While this diversity and breadth of SSOs can be perceived as overwhelming, the truth is that it has emerged as a result of the market in which we all operate. It provides for flexibility, competition and choice. No one process can guarantee that every standard it produces has some level of immediate intrinsic value. No one standards body or process necessarily produces “better” standards; again the test of success and relevance of a standard is the extent to which it ultimately gets used in the marketplace. (As an example, the IETF TCP/IP standard became much more widely implemented than the ISO OSI standard despite the fact that ISO has produced many other very successful ICT standards.) SSOs routinely review their activities, procedures and policies, and they make improvements and changes as needed.

Standards-setting organizations also have collaborative actions and liaisons between themselves, and with other bodies that support related conformance or interoperability testing, business initiatives and so on. Many standards make references to other standards coming from other SSOs or have ratification processes that they apply to other SSOs’ work.

There is certainly no shortage of people who find the diversity of SSOs confusing and frustrating, and from time to time I find myself in that camp. However, any conversation about making changes to the broad array of standards setting processes that we know today has to dig deeply into why we are where we are, and has to recognize the many successful standards that are already implemented by in hardware and software by many hundreds of developers using every possible language and from every possible discipline.

While the subject of reform is an important discussion point when it comes to SSO governance we risk the word bringing an unnecessary level of drama along with it. What I would personally rather see is a broader array of voices collaborating in the ongoing work to evolve the process that we have today to meet the needs that we know the industry will have in years to come.

We have a proven, solid and working standards setting system in place today and in my view it is important that as a community and as an industry we continue to build upon that.